Handful of States Propose Lower ACA Premium Rates for 2019

A relatively small number of states expect lower ACA premium rates for 2019 as local governments take regulations into their own hands.

September 10, 2018 - Several states have announced lower ACA premium rates for 2019, bucking a national trend brought on by unstable markets and regulatory changes.

While early proposals from a number of states, including Virginia, Maryland, and Oregon, indicated that premiums were likely to rise significantly in the upcoming plan year, other regions such as Tennessee, New Hampshire, Pennsylvania, and New Jersey expect little upward movement in prices.

Lower or neutral premium prices are due to increased competition and regulatory efforts to control market instability, lawmakers said, offering a blueprint for other states to follow as the ACA continues to face challenges.

Premium requests for the 2019 plan year in Tennessee included two payers planning to cut prices by more than 10 percent, said the Tennessee Department of Commerce and Insurance (TDCI).

The two payers, BlueCross BlueShield of Tennessee and Cigna, requested a decrease of 14.8 percent and 12.9 percent, respectively, for individual health plan premiums. The state believes that entry of two new payers into the individual health plan market helped to drive down premiums for the upcoming plan year.

“Two carriers are entering Tennessee markets for the first time in 2019, and another is expanding its coverage area, resulting in more options for more Tennessee consumers. Tennesseans will see competition that currently does not exist in many parts of the state, including in and around Chattanooga, Knoxville, and Memphis. Additionally, for the first time in the ACA marketplace era, we have approved premium rate decreases from two longtime market participants.”

Tennessee is only expecting one individual health plan insurer to raise premium rates for 2019. Oscar Health requested rates increase of 7.2 percent and 10.8 percent for health plans in the Nashville and Memphis regions.

Individual health plan premiums expected to decrease in New Hampshire

Individual health plan premiums in New Hampshire are expected to decline by an average of 6.75 percent in 2019.

State officials are hopeful that individual premiums are beginning to stabilize for New Hampshire residents after premiums rose significantly in 2018. New Hampshire officials believe the lower premium rates are the early results of collaboration between lawmakers and payers.

“Despite uncertainty at the federal level, a modest decrease in premium rates for New Hampshire residents is a move in the right direction,” said Insurance Commissioner John Elias. “Rates are still high, particularly for NH residents who do not qualify for premium assistance, but we will continue to work collaboratively with insurance companies and pursue other efforts to improve market stability in New Hampshire.”

Governor Chris Sununu also praised the state’s efforts to contain prices for consumers.

“While other states are seeing the further collapse of their individual market, New Hampshire providers are anticipating a decrease in the cost of premiums,” Sununu said. “This is a stark contrast to last year’s premium increase of over 50 percent and is due to our commitment to working with the industry to drive down premiums and make necessary changes to deliver real savings for the people of our state.”

New Hampshire will finalize its individual health plan premium rates on November 1, 2018.

The department did not grant payers their initial requests after it calculated copayment and coinsurance costs for consumers. Payers in the state also revised their premium rate requests after the state provided input during the rate review process. Payers sponsoring small group ACA health plans only requested premiums increases of 2.4 percent.

Insurance Commissioner Jessica Altman said new competition in the state’s ACA health plan market also helped to prevent premiums from increasing significantly for 2019.

More payers have entered the Pennsylvania market in recent months. In 2017, twenty counties in the state only had one insurance carrier. In 2018, that number decreased to just 8 counties without additional insurance options. Four out of the state’s five individual health plan payers extended insurance offerings into new counties between 2017 and 2018.

Market stabilization policies control premium growth in New Jersey

New Jersey payers sponsoring individual ACA health plans initially proposed premiums increases of 12.6 percent, but only requested a 5.8 percent increase after the state passed an individual mandate for insurance.

The effects of mandate included significant premium rate reductions for specific payer organizations. Before the mandate passed, in-state payers Oxford and AmeriHealth originally requested 2019 premium increases of 11.8 percent and 9.4 percent, respectively. Both lowered their requests to 1.8 percent and 0.8 percent after the mandate became law.

“Carriers were clear that without state action, the average increase requested in the individual market would have more than doubled,” said Department of Banking and Insurance Commissioner Marlene Caride. “We are pleased that the initial rate filings demonstrate concrete results from state efforts. The department is now undertaking its review process to determine if all rates submitted for the individual and small employer markets are justified and comply with the law.”

In addition, the state expects individual health plan premiums to fall by an additional 15 percent through a five-year reinsurance program. The reinsurance program is expected to stabilize the state’s insurance market, increase individual health plan enrollment, and protect payers from expensive claims over $200,000.